Shares slipped 7 percent at the opening bell Tuesday then inched back up, after the company warned it would miss third-quarter estimates. Cisco said it would eventually recover from a slowing economy, but analysts were debating whether it would ever regain its former glory.

Cisco said Monday that it expects third-quarter per-share earnings to be in the low single digits, with revenue falling 30 percent from the $6.75 billion it posted in the second quarter. Wall Street was expecting the company to report earnings of 8 cents per share on revenue of around $5.95 billion, according to First Call.

Shares closed down 54 cents, or about 3 percent, to $16.66, with more than 179 million shares trading hands.

In March, Cisco had announced it would lay off 8,000 workers amid concerns that economic problems present in North America could spread overseas, prompting many analysts to slash targets for the San Jose, Calif.-based company. On Monday, it upped that figure to 8,500.

So while Monday's news was not much of a shock to analysts, the size of the company's planned write-offs was surprising. Cisco said it would take a charge of $800 million to $1.2 billion because of a restructuring, as well as a $2.5 billion charge to write off excess inventory.

Though that charge is large, it should allow the company "to relatively protect its margin structure in the near term," wrote J.P. Morgan Chase analyst Gregory Geiling.

Geiling was somewhat optimistic that things could eventually turn around for the company, writing in a research note that "while the lack of earnings visibility continues to keep us neutral on the stock in the near term, we remain strong in our belief that Cisco is one of the stocks we would come back to the quickest once the definitive signs of macro spending trends begin to improve."

That view was backed up by Merrill Lynch's Michael Ching, who noted that the company "has a debt-free balance sheet and continues to generate cash, the tools for future growth."

"We believe that Cisco will remain the leader in the networking infrastructure market, and that once the industry recovers, Cisco will be front and center," he wrote, adding that he was maintaining his "immediate-term accumulate" rating on the stock, although he lowered fiscal 2001 earnings estimates from 50 cents per share to 38 cents and 2002 estimates from 51 cents per share to 24 cents.

But other analysts were more skeptical about the company's claims that it would see growth rates of 30 percent to 50 percent after the economy picks up again. Some questioned whether the recovery would come as soon as Cisco predicted, while others doubted whether Cisco would necessarily be the company that would benefit from it.

"We do not believe that this is strictly a function of macroeconomic issues for Cisco, and in our opinion, Cisco has lost much of its leadership position!" exclaimed Robertson Stephens analyst Paul Johnson. "We believe their leading competitors will continue to take market share from Cisco at an accelerated pace throughout the slowdown, especially in the service provider-focused product arena.

"In fact, we believe that the lengthening sell cycles may give incumbent carriers (many of which are Cisco houses) a chance to really experience next-generation equipment in the labs and, as a result, move away from Cisco products."

Johnson said that he was maintaining his "market performer" rating on the stock.

Dresdner Kleinwort Wasserstein analyst Ariane Mahler noted that Cisco's return to high growth could take longer than predicted, saying that "while Cisco still believes this target is achievable, its near-complete lack of visibility into fiscal 2002 and beyond leaves ample room for the timing of such event to be pushed into the distant future."

And while some areas of the company could continue to see strong growth, it's doubtful that the entire company could maintain the astronomical growth rates it's had in the past, said Steve Kamman, an analyst at CIBC World Markets.

"It's the price of success," Kamman said. "Everything Cisco has done to become such a fantastically great company has led to the problems they face now. You've got to give them their due for what they've achieved, but the market is relentlessly forward-looking."